Leasehold Titles

Leases and Land Registration

The Registration of Title Act allows for the creation of registered leasehold titles in respect of the lessee’s interest under a lease for a  term of more than 21 years.  A lease for a term of less than  21 years’ duration affects registered land without registration, provided that the tenant is in actual occupation under the lease.

The registrar may register a leasehold title, with an absolute title, good leasehold title or possessory title.  In the case of absolute title, both the leasehold and freehold title from which it was granted are guaranteed by the Land Registry. In the case of good leasehold title, the title to the leasehold interest only is guaranteed.

A lease for the duration of a life or lives or determinable on a life, must be registered in order to affect the registered title. The life is usually that of the leaseholder, but it may be that of a third party, whose life accordingly marks the duration of the interest. The creation of such interests is curtailed by the 2009 Act.

Unregistered title Leases

A lease may be registered as a burden on a freehold folio.  Since 1967 where a new lease for a term of more than  21 years is registered as a burden on a freehold folio, then a separate leasehold registered title must be opened in respect of it.  A leasehold interest of more than 21-year duration must be registered on a grant or assignment (21 years’ unexpired duration), which constitutes a sale.

There still exist a substantial number of pre-1967 long leases which are held as unregistered title interest while being registered as burdens on the freehold folio, but they themselves are subject to the registry of deeds under the registered title system.

Possessory Title & Leases

In the case of possessory title, the registration as owner does not affect or prejudice the enforcement of any right adverse to or in derogation of the title of that person and subsisting or capable of arising at the time of registration, but, subject to this, shall have the same effect as registration with an absolute title.

The possessory title will not be registered unless the applicant has been in possession for not less than twelve years and proves on an affidavit to the Land Registry the basis on which he has acquired title under the Statute of Limitations.

A possessory title may be acquired in respect of leasehold interest.  Certain anomalies exist, but the effect is that the squatter or person acquiring title by possession is de facto, lessee, if not legally, lessee.

It is possible to register notices of leases of less than 21 years’ duration. This is not registered as a burden.  The application for registration of a lease is similar to an application for first registration.

First Registration

Much the same procedures apply as apply to the first registration of leasehold title as apply to freehold land.  The position may be facilitated if the freehold title is already registered.

There may already be an established subdivision of freehold title identifying the part which is subject to the lease.  This will facilitate enlargement on registration of a leasehold interest into a freehold interest if that interest is later acquired, as is commonly the case.

A sublease may be registered as a burden on an existing leasehold folio provided it is not a Section 72 burden, i.e. a lease for a term of 21 years or less.

Cancellation

A lease may determine in a number of matters, including forfeiture, re-entry on foot of court action or a peaceful re-entry.  An application may be made to Land Registry vouching for the relevant facts to cancel the lease as a burden in such circumstances. Notice may be served on the leaseholder if there is any basis on which it might oppose the application.

Where a lease has been terminated by forfeiture and re-entry, the leasehold folio in respect of it may be terminated by an application which furnished proof of the position.

A court order or other evidence of effective forfeiture or surrender will be required.  In the case of forfeiture of a lease, a period is allowed in which the lessee may apply for relief from forfeiture.